Total Cost Concept of Product Pricing Smart Stream Inc. uses the total cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 cellular phones are as follows:

Variable costs per unit: Fixed costs: Direct materials $150 Factory overhead $350,000 Direct labor 25 Selling and admin. exp. 140,000 Factory overhead 40 Selling and administrative expenses 25 Total $240 Smart Stream desires a profit equal to a 30% rate of return on invested assets of $1,200,000.

a.Determine the total costs and the total cost amount per unit for the production and sale of 10,000 cellular phones.

Total cost $

Cost amount per unit $

b.Determine the total cost markup percentage (rounded to two decimal places) for cellular phones.

%

c.Determine the selling price of cellular phones. Round to the nearest dollar

Total Cost Concept of Product Pricing

Smart Stream Inc. uses the total cost concept of applying the cost-plus approach to product

pricing. The costs of producing and selling 10,000 cellular phones are as follows:

Variable costs per unit:

Direct materials

$150

Direct labor

25

Factory overhead

40

Selling and administrative expenses

25

Total

$240 Fixed costs:

Factory overhead

$350,000

Selling and admin. exp. 140,000 Smart Stream desires a profit equal to a 30% rate of return on invested assets of $1,200,000.

a. Determine the total costs and the total cost amount per unit for the production and sale of

10,000 cellular phones.

Total cost

Cost amount per unit $

$ b. Determine the total cost markup percentage (rounded to two decimal places) for cellular

phones.

% c. Determine the selling price of cellular phones. Round to the nearest dollar

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